Investors have all but priced out the chance of a rate hike at the end of the Fed’s two-day policy meeting on Wednesday, particularly given its adherence in recent years to only raising rates at meetings that are followed by press conferences.
The central bank is due to announce its decision at 2 p.m. EDT (1800 GMT) on Wednesday. Fed Chairman Jerome Powell is not scheduled to hold a press conference.
“Fed speakers have done little to push back against this expectation ... we expect no fireworks,” JPMorgan economist Michael Feroli said in a note to clients.
• U.S. President Donald Trump on Tuesday criticized the leak of more than 40 questions that Special Counsel Robert Mueller wants to ask him as part of a probe into Russia’s alleged election meddling and possible collusion by the Trump campaign.
As negotiations continue over whether Trump will sit for an interview, the New York Times obtained a lengthy list of questions Mueller and his team have prepared for the president.
“So disgraceful that the questions concerning the Russian Witch Hunt were ‘leaked’ to the media. No questions on Collusion,” Trump wrote on Twitter. “It would seem very hard to obstruct justice for a crime that never happened!”
The list of at least four dozen questions includes ones on Trump’s ties to Russia and others to determine whether the president may have unlawfully tried to obstruct the investigation, the Times reported.
Most of the questions relate to possible obstruction of justice, the reports said.
• Special Counsel Robert Mueller, in a meeting with President Donald Trump’s lawyers in March, raised the possibility of issuing a subpoena for Trump if he declines to talk to investigators in the Russia probe, a former lawyer for the president said on Tuesday.
The Post said Mueller had raised the possibility of a subpoena after Trump’s lawyers said the president had no obligation to talk with federal investigators involved in the probe.
• Signs of fading growth momentum across Europe have come as bad news to equity investors hoping for a repeat of 2017’s bumper returns, but many say they’re not ready to throw in the towel yet on companies that are still delivering strong earnings.
Some of that enthusiasm has waned since. European stocks still failed to match Wall Street gains, rising just 1.3 percent this year, after surging 10 percent in 2017 .STOXXE.
More ominously, a string of economic data has raised doubts that corporate profits will keep rising. That has knocked the index 4.2 percent off January highs and some $19 billion has fled euro equity funds in the past seven weeks, data from EPFR shows.
Funds’ allocations to euro zone equities dropped to a 13-month low in April, according to Bank of America Merrill Lynch, which says “overweight” positions have slipped to 34 percent versus 58 percent last October.
• Chinese President Xi Jinping’s top economic adviser, Vice Premier Liu He, will meet a top-level U.S. trade delegation in Beijing this week, state media said on Wednesday, amid a festering dispute between the world’s two largest economies.
The U.S. visitors include Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, White House trade and manufacturing adviser Peter Navarro and new White House economic adviser Larry Kudlow.
• South Korea said on Wednesday the issue of U.S. troops stationed in the South is unrelated to any future peace treaty with North Korea and that American forces should stay even if such an agreement is signed.
However, Seoul wants the troops to stay because U.S. forces in South Korea play the role of a mediator in military confrontations between neighboring superpowers like China and Japan, another presidential official told reporters on condition of anonymity earlier on Wednesday.
• German manufacturing grew at the slowest pace in nine months in April, a survey showed on Wednesday, as new-orders growth slowed for the fourth consecutive month.
Markit’s Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of the economy, fell to 58.1 from 58.2 in March. That matched a flash reading and was well above the 50 line that separates growth from contraction.
Despite the fall in the headline index, output rose faster than it had in March, suggesting manufacturing had made a solid start to the second quarter.
• Manufacturing activity remained relatively solid in major Asian economies such as China and Japan in April, but exports showed signs of weakness across the region, a worrying development given heightened Sino-U.S. trade tensions.
High-level U.S. and Chinese officials meet in China this week, with trade expected to be top of the agenda as both sides have threatened reciprocal tariffs on hundreds of billions of dollars worth of imports.
The meetings’ outcome could be crucial for the outlook for Asian exporters as Purchasing Managers Index (PMI) surveys of factory activity are already pointing to a slowdown.
“What we’re seeing is a cyclical soft patch in exports after a very strong rise last year,” said Dong Chen, senior Asia economist at Pictet Wealth Management.
“Without considering the potential trade war, we’re not very worried about it, we think it’s fairly normal. But if we think about the trade war ... then the outlook is quite uncertain. It could potentially bring more damage going forward.”
• Ahead of a meeting between officials from the world's two largest economies to iron out their trade tensions, state-owned Chinese media has one message for the American delegates: Don't expect China to give into all of your demand.
• Oil prices rose on Wednesday, pushed up by concerns that the United States may reimpose sanctions on major exporter Iran, although soaring U.S. supplies capped gains.
Brent crude oil futures LCOc1 were at $73.42 per barrel at 0658 GMT, up 29 cents, or 0.4 percent from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 45 cents, or 0.7 percent, at $67.70 per barrel.
Reference: Reuters, CNBC,FX Street
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